Caucasian Press Review (March 29th - April 3rd)

Caucasian Press Review (March 29th - April 3rd)

On March 31st Vladimir Putin met in Moscow with the South Ossetian President Leonid Tibilov, who arrived in Russia on a working visit. According to the 'South Ossetia' newspaper, the 'North Ossetia' newspaper and the online edition of Sputnik-Abkhazia, they discussed a broad range of issues of bilateral cooperation, primarily in the sphere of South Ossetia’s socioeconomic development. This was the seventh meeting of the leaders of the two countries in four years.

Putin noted the strengthening of relations between the two countries, as well as joint work in the inter-parliamentary segment. "You know that Russia has been providing assistance to the republic since 2008," the Russian president noted. "This year we have earmarked 8.2 billion rubles, of which 3.6 billion are part of an investment program designed through 2017". He recalled that the program includes housing construction, the Drama Theatre and a hospital, including a children’s ward. "In general, the issues are being resolved, moving forward," the President stated. Putin also touched on the cooperation in the international arena, including the format of the Geneva consultations. He described a certain decline of trade and economic relations as temporary and explained it by general trends in the economy.

The President of South Ossetia, in his turn, said that the republic is steadily moving towards the completion of the recovery process, and the matter of security in case of external aggression remains its number one priority. According to him, thanks to Russia’s support, peace and calm have come to South Ossetia and the main challenge of the republic’s citizens and its leadership is to maintain the stability they have been working for over the past 4 years. "The people of South Ossetia are very proud of acquiring the status of Russia’s ally, because the matter of security in case of external aggression is our number one priority," the head of the republic stressed. Tibilov also said that Russia's assistance always reaches its destination. "Different things happened before. I can say that we have overcome all of it and we are doing well," Tibilov noted.

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The aggravation of the situation in the Nagorno-Karabakh region is being actively discussed in the Georgian media. The leader of the 'Georgian Reforms Association', Elena Khoshtaria, believes that Georgia's position on the escalation of hostilities in Nagorno-Karabakh should be very careful, News Georgia reports. According to her, the Georgian government should have a plan of action if it will become a large-scale confrontation, and Russia will decide to deliver military cargo to Armenia via Georgia.

Georgian MP Gia Volsky said that Georgia is ready to offer Tbilisi as a venue for talks between Armenia and Azerbaijan against the background of the escalation of the situation in Nagorno-Karabakh. "Quite unfortunate events have happened. Apart from the victims, there is an emergency related to the security of the region, the South Caucasus. Now it's time that the Minsk Group should urgently meet and that confrontation must be moved back to the negotiation mode. If we take into account the processes in the world, this hotspot is another serious international security challenge.

We can offer Tbilisi, Georgia, as a venue for talks in any format. Now is the time when the world's leading countries should take extraordinary decisions. I think that the UN Security Council is the place where discussions on this issue should be started," Volsky said.

Doctor of Political Sciences Vakhtang Maisaya adheres to a similar opinion. He believes that the military confrontation can escalate into a local war at this stage, which, in its turn, will become a regional war. Then such regional powers as Turkey and Russia main join it, which will necessarily lead to a violation of  a military balance in the Transcaucasian region. "I think that the sides will come to their senses. Georgia should take an active part in the negotiations, to prevent the transformation of the conflict into a local war. Georgia already now has to become an active intermediary between Armenia and Azerbaijan, together with the international community. Georgia's participation in the negotiations in order to resolve military confrontation in the region should be at the level of first persons," the Free Georgia newspaper cited the expert as saying.

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The Georgian side has verbally assured that the Russian delegation won't have any difficulties and it would be able to enter the country to participate in the regular session of the OSCE Parliamentary Assembly (OSCE PA) at full strength, the Free Georgia newspaper reports with reference to the deputy head of the Russian delegation, Nikolay Kovalyov.

Earlier, the Russian Deputy Foreign Minister Grigory Karasin said that said that Russian MPs are considering the possibility of going to a meeting of the OSCE Parliamentary Assembly to be held in Tbilisi in July, but they need to have a guarantee of security and that the existing law ‘On the occupation’ will not create problems for the deputies. Karasin said that it would be good if the Georgian authorities would abolish the law. Abkhazia and South Ossetia were recognized by Georgia as occupied territories in response to Russia's recognition of their independence after the war in August 2008. According to the law ‘On the occupied territories’, to visit them without permission from Tbilisi is illegal and punishable by a large fine or imprisonment of up to four years. In addition, in the summer of 2015 Finland refused to give permission to enter the country to the Russian parliamentarians who are under sanctions, the Russian State Duma Speaker Sergey Naryshkin was among them, to participate in the summer session of the OSCE PA. Therefore, the Russian delegation decided not to go to Helsinki at all.

"Despite the fact that Georgia is moving towards its elections and anti-Russian rhetoric, nevertheless, with regard to the work of the Parliamentary Assembly, Georgia assured that there no obstacles and the full complement of the Russian delegation will be allowed. We, of course, want to get a written guarantee, which was promised, but we haven't received it so far," Kovalev told reporters.

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On Tuesday the Minister for the North Caucasus, Lev Kuznetsov, and the head of Dagestan, Ramazan Abdullatipov, participated in the plenary session 'Strategy of development of engineering and technical potential of the republic of Dagestan', held in the framework of the Second Republican Forum of Industrialists and Entrepreneurs, the 'Dagestani Pravda' newspaper informs.

Speaking about the rates of socio-economic development of Dagestan during 2015, the head of the republic reported that the index of release of goods and services for basic economic activities increased by 5.5%, investments in fixed capital increased by 4.8%, the volumes of agricultural production - by 5.1%, industry - by 2%. The index of industrial production in January-February of 2016 as a whole amounted to about 126%.

"Over the past three years, industrial production in Dagestan has increased by 1.6 times. A significant production growth was achieved in such economic activities as the production of electrical and optical equipment (139.8%), production of transport equipment (146.5%), machinery production (119.3%), production of other non-metallic mineral products (112.4%).

Occupying 6.2% in GRP structure, Dagestan industry provides more than 35% of tax payments to the budget of the republic.

Work to identify problematic issues in the conclusion of defense contracts was carried out with every industrial company, included in the system of military-industrial complex, and their solutions were worked out.

The growth of state defense order volume for 2015 amounted to 110.4% of the 2014 level. At the initiative of the republican authorities, comprehensive decisions on financial improvement of the leader of Dagestan industry - 'Dagdizel' factory, have been adopted at the federal level. The "road map" for radical technological modernization of the enterprise was developed, which has been successfully implemented; Currently, the factory operates in the working mode.

Over the past years, Dagestan began to produce more than 80 kinds of products as part of the import substitution program. However, as Abdullatipov noted, "its successful implementation is impossible without capital substitution". In his opinion, it is impossible to make a breakthrough in the development of the industry without effectively working credit and banking system, which mainly serves itself and its interests right now. These issues require priority solution.

"We must create competitive products, and enter the external markets more actively. We should actively use the creation of industrial parks and technological parks Tyube and Uytash; these platforms can be fully used for the creation of industrial production and jobs," Abdullatipov outlined the upcoming tasks.

Speaking at the forum, Lev Kuznetsov stressed that Dagestan is one of the industrial centers in the South of Russia which can and should produce modern, high-tech and demanded production. "There are many enterprises here which produce unique production and provide the needs of not only domestic, but also foreign markets. Therefore it is necessary to support effective enterprises, to bring the most relevant innovative developments to the production, to promote the implementation of new scientific and technical developments and investment projects. Updated state program for the North Caucasus will be the most important tool to achieve these tasks in the coming years," the Minister said.

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The factory for the production of energy-saving lighting equipment based on superbright diodes, the construction of which will be completed in Malgobek by 2017, will produce 700 thousand filamentous lamps and light fixtures per year, 'Ingushetia' newspaper reports. The enterprise will use modern equipment that allows to produce 300 thousand light fixtures and 400 thousand filamentous lamps annually, as well as optical modules of large and small capacity, for a total sum of 856 million rubles per year. Experts predict that the percentage of import substitution will be 7-8% on light fixtures and 100% on filamentous lamps. After reaching the designed capacity of the factory, annual net profit will amount to 350 million rubles. Project payback period - 4-5 years. In addition, the factory plans to produce 18 tons of pastes for thick-film technology annually, on a total sum of 168 million rubles, while the total annual consumption in the Russian market is 50 tons.

As the newspaper writes, the main purpose of construction of the industrial facility is the organization of a cost-effective, modern and profitable enterprise. The project has been implemented by the Industry and Trade Ministry of the Russian Federation since 2013 in the framework of the Federal Target Program of socio-economic development of the region until 2016. According to the business plan, 300 million rubles are needed to launch production and reach full production capacity. At present, the issue of attracting private investment has been resolved. The total volume of financing for the construction of the factory for 2013-2015 has amounted to over 1.13 billion rubles. In 2016, financing amounting to about 255 million rubles is planned. Currently the state contracts for a total amount of 1.3 billion rubles have already been signed. It is expected that the factory will partially work for Rosoboronexport.

The factory consists of two buildings: administrative and production. Interior decoration works are being carried out right now in the first one, the construction of the production building has been completed by 60%. The opening of the factory will create about 700 new jobs. The Ingush authorities believe that the commissioning of large industrial facilities, including this factory, will largely affect the reduction of tension in the labor market, and in the future will mitigate the level of the republic's dependence on federal subsidies.

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According to the Karachay-Cherkess newspaper 'Republic Day', seven new residents will appear in the special economic zone (SEZ) of the tourist-recreational type 'Arkhyz', who will invest 1.7 billion rubles in the construction of the infrastructure of the resort of the same name. Their applications were approved by the Expert Council for Special Economic Zones of the Economic Development Ministry. Thus, the total number of 'Arkhyz' SEZ residents will amount to 24 companies, and the total amount of investments will amount to 5.6 billion rubles.

As the publication notes, the interest of private investors in the 'Arkhyz' site increases in the process of its dynamic development. If in the first stage you had to look for those who are willing to invest their own funds in the project, now there is an opportunity to select the most competitive projects from the number of those proposed for implementation.

The business plans of new residents include the construction of four apartment hotels with more than 750 rooms, a 3-star hotel complex with 299 rooms, and a 4-star hotel with 200 rooms. In total, residents will commission approximately 1250 rooms of different levels of comfort. The composition of apartment hotels and resorts will also include restaurants with 160 seats, cafe, lobby and lounge bars with 180 seats. Underground parking, conference rooms and ski equipment rental shops will be opened. One of the residents, 'Caucasian Resorts', plans to build a restaurant with 200 seats and a children's center with a gym and a game room, designed to receive 60 young guests of 'Arkhyz' at the same time. A SPA-center, fitness area, billiards and bowling, as well as a trout pond for sport fishing and a recreational area with wooden houses will provide leisure time for visitors. During the implementation of business projects, new residents of 'Arkhyz' will additionally create over 330 jobs.


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